Budget 2024: FM Nirmala Sitharaman proposes simpler tax regime to boost cruise ship industry

Nirmala Sitharaman said ownership, leasing and flagging reforms will be implemented to increase the share of the Indian shipping industry and create more jobs.

Published on: Jul 23, 2024, 16:47:09 IST

By HT News Desk

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Finance minister Nirmala Sitharaman on Tuesday proposed a simple tax scheme for foreign shipping companies operating domestic cruises to boost cruise tourism in the country during the Union budget presentation.

"To give a fillip to this employment generating industry, I am proposing a simpler tax regime for foreign shipping companies operating domestic cruises in the country," Sitharaman said (File Photo)

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Minister Sitharaman said ownership, leasing and flagging reforms will be implemented to increase the share of the Indian shipping industry and generate more employment.

"To give a fillip to this employment generating industry, I am proposing a simpler tax regime for foreign shipping companies operating domestic cruises in the country," she said, reported news agency PTI.

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These amendments which are set to take effect from April 1, 2025, have been proposed in the budget to make India an attractive tourism destination, to attract global tourist to cruise shipping in India and to popularise cruise shipping with Indian tourists.

According to the budget document, a new taxation regime for cruise-ships business by non residents comes with a tax exemption for lease rentals, if the foreign company and the non-resident cruise ship operator have the same holding company.

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It was also proposed to insert a new Section 44 BBC which would ensure that 20 per cent of the total earnings of the non-resident cruise ship operators, would be considered their profit. This would nullify the existing Section 44 B relating to presumptive taxation for shipping business of non-residents for cruise-ship business.

The amendments will accordingly, apply in relation to the assessment year 2025-26 and subsequent assessment years, reported PTI.

According to the budget document, participation of international cruise-ship operators in this sector will encourage its development and thus create access to the best international practices.

(with inputs from PTI)

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